SAP Corporate Citizenship team supports the work of Transparency International, the leading NGO think tank on the topic of corruption. Corruption is a major detriment to market and institutional development and ultimately leads to instability, economic decline & conflict as states and governing institutions degrade & collapse. But enterprise software and good business process design has huge potential to control corruption and support institutional reform. More prosaically, this issue is a huge legal risk to business world wide due to recently strengthened legislation and prosecutorial action. The US Foreign Corrupt Practices Act (FCPA) is very actively enforced against US listed companies and recently the Siemens case in Germany has sent shock waves. Expect more of the same in the future as national regulators are challenged by bodies such as the OECD to prove that they are serious about corruption control. Recently SAP has joined a business led initiative to help develop real business strategies to manage corruption risk. The initiative is led by Transparency International (TI), the International Chamber of Commerce (ICC), UN Global Compact (UNGC) and the World Economic Forum (WEF). The initiative is called RESIST.
SAP and Alcan have been assigned a specific scenario to work up: a fee is demanded by the local government agency for technical approval of equipment. OK, on the surface of it the situation seems harmless but in fact it can be a typical form of extortion in weakly regulated markets and it may come in the form of an unreasonable demand that threatens business continuity. The easy thing maybe to pay but this may violate regulations in the home market and encourage further deterioration of the business climate locally. So how do we manage the situation?The joint working group (TI, UNGC, WEF, ICC) suggests categorizing action as follows:
1. Demand prevention: eg. tactics relating to reduced opportunity for demand, reduced likelihood of success, increased negative consequences for extortionists.
2. Response to Demands: eg. method of refusal, incident investigation, disclosure, reputation development, collective action.
I would like to involve the community in this initiative and I will seek to credit the community with acknowledgment in the final publication of the collected scenarios and suggested strategies. I have a completed sample scenario if anyone would like to see a good example. *UPDATED LINK TO EXAMPLE FOUND here I will invite some experts from the working group to participate in the conversation. I am also really thrilled that SAP Chief Compliance, Melissa Lea has agreed to come along and participate in this discussion. Melissa has studied this difficult area of compliance quite closely. I do hope you will join in on this thread and I look forward to your comments and ideas on Demand Prevention and Response to Demands for the scenario of a fee is demanded by the local government agency for technical approval of equipment.